Marudhar Hotels Pvt. Ltd., JODHPUR v. ACIT, JODHPUR

ITA 485/JODH/2009 | 2005-2006
Pronouncement Date: 09-12-2011 | Result: Allowed

Appeal Details

RSA Number 48523314 RSA 2009
Assessee PAN AABCM0773G
Bench Jodhpur
Appeal Number ITA 485/JODH/2009
Duration Of Justice 2 year(s) 3 month(s) 28 day(s)
Appellant Marudhar Hotels Pvt. Ltd., JODHPUR
Respondent ACIT, JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 09-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 09-12-2011
Date Of Final Hearing 07-12-2011
Next Hearing Date 07-12-2011
Assessment Year 2005-2006
Appeal Filed On 11-08-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR (BEFORE SHRI R.K. GUPTA AND SHRI .N.L. KALR A ) ITA NO.485/JU/2009 ASSESSMENT YEAR : 2005-06 PAN: AABCM 0773 G M/S. MARUDHAR HOTELS (P) LTD. VS. THE ACIT UMAID BHAWAN PALACE CIRCLE- 1 JODHPUR JODHPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV PANDEY DEPARTMENT BY: SHRI G.R. KOKANI DATE OF HEARING: 07-12-2011 DATE OF PRONOUNCEMENT: 09-12-2011 ORDER PER N.L. KALRA AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD.CIT(A) JODHPUR DATED 09-06-2009 FOR THE ASSESSMENT YEAR 2005-06. 2.1 THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN IMPOSING PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 18 99 680/-. 2.2 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED RETURN OF INCOME ON 28- 10-2005. IN THE RETURN OF INCOME THE ASSESSEE CLAI MED THE DEPRECIATION ON HOTEL BUILDING SWIMMING POOL TUBE WELL ETC. @ 20%INSTEA D OF PRESCRIBED RATE OF 10%. THEREFORE THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 29-052007. IN RESPONSE TO NOTICE U 148 OF THE ACT THE ASSESSEE REVISED ITS C LAIM OF DEPRECIATION BY APPLYING CORRECT RATES OF THE DEPRECIATION IN THE RETURN OF INCOME FILED IN PURSUANCE TO THE NOTICE U/S 148 OF THE ACT. THE ASSESSMENT WAS COMPL ETED VIDE ORDER DATED 19 TH 2 DEC. 2008. THE AO HAS NOT INITIATED THE PENALTY PRO CEEDINGS U/S 271(1)( C) OF THE ACT. 2.3 THE LD.CIT(A) ISSUED THE SHOW CAUSE NOTICE ON 2 7-02-2009 DURING THE APPELLATE PROCEEDINGS BEFORE HIM VIDE WHICH THE ASS ESSEE WAS ASKED TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) BE NOT IMPOSED. THE ASSESSEE FILED THE WRITTEN SUBMISSIONS BEFORE THE LD.CIT(A). IN THE REPLY IT WAS SUBMITTED THAT ASSESSEE CLAIMED DEPRECIATION ON HOTEL BUILDING BY OVERSIGHT AT OLD PRESCRIBED RATES OF 20% IN PLACE OF REVISED RATE OF DEPRECIATION ON HOTEL B UILDING @ 10%. THIS MISTAKE WAS CORRECTED WHILE FILING THE REVISED RETURN. IT W AS POINTED OUT TO THE LD.CIT(A) THAT ASSESSEE CLAIMED SET OFF OF BROUGHT FORWARD L OSSES OF RS. 39 82 104/ AGAINST INCOME FROM CAPITAL GAIN BUT THE SAME WAS NOT ALLOW ED AS ACCORDING TO THE AO THE LOSS CLAIMED FOR THE FIRST TIME CANNOT BE MADE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HENCE IN CASE THE LOSS WHICH IS ALLOWABLE TO THE ASSESSEE IS CONSIDERED THEN THE INCOME WILL BE LESS THAN THE ORIGINAL RETURN. FROM THIS THE LD. AR SUBMITTED BEFORE THE LD.CIT(A) THA T THERE WAS NO CASE OF AVOIDING ANY PAYMENT OF TAX AND THERE WAS ONLY A BONAFIDE MI SAKE. THE LD.CIT(A) IMPOSED THE PENALTY VIDE ORDER DATED 09-06-2009. THE LD.CIT (A) HELD THAT ASSESSEE BY MAKING WRONGFUL CLAIM OF EXCESSIVE DEPRECIATION HAS FILED INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY THE PENALTY OF RS. 28 21 866/- HAS BEEN IMPOSED. 2.4 WE HAVE HEARD BOTH THE PARTIES. IT IS TRUE THAT THE LD.CIT(A) HAS POWER TO IMPOSE THE PENALTY U/S 271(1)( C) OF THE ACT. THE PROCEEDINGS CAN BE INITIATED IN THE COURSE OF PROCEEDINGS BEFORE THE RESPECTIVE AUT HORITY. SUCH INITIATION IS ON THE 3 BASIS OF SATISFACTION.THE AO WHILE COMPLETING THE A SSESSMENT HAS NOT INITIATED THE PENALTY PROCEEDINGS ON ACCOUNT OF WRONG CLAIM OF DE PRECIATION. SUCH ISSUE WAS NOT BEFORE THE LD.CIT(A). THERE WAS NO CASE OF ANY SATISFACTION BY THE LD.CIT(A) IN RESPECT OF INITIATION OF PENALTY PROCEEDINGS IN THE APPELLATE PROCEEDINGS. THE LD.CIT(A) HAS DEFINITELY JURISDICTION TO INITIATE T HE PROCEEDINGS ON THE ISSUES ON WHICH HE HAS MADE ENHANCEMENT. IN THE FOLLOWING CA SES IT HAS BEEN HELD THAT AO CANNOT IMPOSE PENALTY ON THE BASIS OF THE FINDINGS IN THE APPEAL. THE AO HAS NO JURISDICTION TO IMPOSE PENALTY IN RELATION TO ITEM OF ENHANCEMENT MADE BY THE FIRST APPELLATE AUTHORITY. WE RELY ON THE FOLLOWING CASE S ON THIS ISSUE. 1. CIT VS SHADIRAM BALMUKUND 84 ITR 183 (ALL) 2. CIT VS DWARKA PRASAD SUBHASH CHANDRA 94 ITR 154 (ALL.) 3. CIT VS ANAND BAZAR PATRIKA 116 ITR 416(CAL) THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS SHADIRAM BALMUKUND (SUPRA) HAD AN OCCASION TO CONSIDER AS TO THE PROCE EDINGS IN WHICH SATISFACTION IS TO BE ARRIVED. IN THE ACT THE WORD USED IS PROCE EDINGS UNDER THE ACT. THE HON'BLE HIGH COURT HELD THAT PROCEEDINGS MUST BE PR OCEEDINGS BEFORE THAT AUTHORITY AND THEY MUST BE PROCEEDING NECESSARILY U NDER SOME PROVISIONS OF THE ACT. IN THAT CASE THE HON'BLE ALLAHABAD HIGH COURT CANCELLED THE PENALTY BECAUSE THE AO IMPOSED THE PENALTY IN RESPECT OF THE ENHANC EMENT MADE BY THE FIRST APPELLATE AUTHORITY. IF THE WORD PROCEEDINGS UNDE R THE ACT AS MENTIONED IN SECTION 271(1)( C) OF THE ACT IS TO BE CONFINED LIT ERALLY THEN THE AO HAS JURISDICTION TO IMPOSE PENALTY IN RESPECT OF ENHAN CEMENT MADE BY THE FIRST 4 APPELLATE AUTHORITY. HOWEVER PROCEEDINGS UNDER THE ACT MEANS PROCEEDINGS BEFORE THE RESPECTIVE AUTHORITY. THUS THE LD.CIT(A) WAS NOT JUSTIFIED IN IMPOSING THE PENALTY. IT IS FURTHER SEEN THAT LD.CIT(A) HAS LEVIED THE PENALTY ON ACCOUNT OF INACCURATE PARTICULARS OF INCOME. THE HON'BLE APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 HAD AN OCCASION TO CONSIDER THE MEANING OF THE WORD OF FURNISHING INACCURATE PARTIC ULARS OF INCOME. THE INFORMATION GIVEN IN THE RETURN IS NOT INCORRECT OR INACCURATE. IT IS ONLY THE PERCENTAGE OF DEPRECIATION WHICH IS INCORRECT. A ME RE MAKING OF CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT T O FURNISHING OF INACCURATE PARTICULARS OF INCOME REGARDING INCOME OF THE ASSES SEE. WE THEREFORE HOLD THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN IMPOSING THE PENALTY . THUS THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 09-1 2-2011 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JODHPUR DATED: 09/12/2011 MISHRA COPY TO: 1. M/S. MARUDHAR HOTEL (P) LTD. JODHPUR 2. THE ACIT CIRCLE- 1 JODHPUR 3.THE LD. CIT (A) BY ORDER 4.THE CIT 5.THE D/R 6.THE GUARD FILE (ITA NO. 485/JU/09) A.R.. ITAT: JODHPUR 5